Thursday, April 28, 2005
Aliant Reports First Quarter Results
- EPS shows solid performance at $0.31
- Wireless revenues grow 15.0 per cent, IT product revenues up 21.1 per cent
Atlantic Canada - April 28, 2005 --
Aliant Inc. (TSX: AIT) today announced its financial results for the period ending March 31, 2005. Consolidated revenues were $524.4 million and net income was $43.6 million for the first quarter. Earnings per share for the quarter of $0.31 demonstrate a strong recovery from the labour disruption and subsequent restructuring efforts that impacted most of 2004.
Revenues, up 1.9 per cent over this time last year, were driven primarily by wireless revenue growth of 15.0 per cent and IT product sales growth of 21.1 per cent. High-speed Internet continued to experience strong subscriber growth of 23.7 per cent year-over-year, however temporary introductory promotions primarily limited revenue growth to 5.7 per cent. These high-growth areas offset a 6.6 per cent decline in local and long distance revenue, which absorbed a $2.5 million charge resulting from a February CRTC decision that mandated incumbents like Aliant Telecommunications to lower prices charged to competitors for digital network services.
President and CEO Jay Forbes said, "We are pleased with how well we have regained our momentum, with the entire organization focusing on our growth and transformation agenda. Our wireless business serves as a perfect example of the strength of this recovery with customer growth of nearly 10 per cent combining with an increase of over 11 per cent in minute usage to drive 15 per cent revenue growth for the quarter. We are also very pleased with our high-speed Internet customer additions during the quarter, which numbered more than 15,500, representing growth of nearly 55 per cent over the same period last year. This growth is a result of our commitment to provide Atlantic Canadians with unparalleled access to broadband services; we remain on schedule to launch our digital television service in the second quarter and plan to launch our Voice-over-IP solutions later this year."
Mr. Forbes continued, "We are also pleased with performance in xwave, where net income grew by 225 per cent over the same period last year, and our IT products business saw gross profit grow by nearly 29 per cent, positive outcomes of our efforts to create efficiencies and reduce costs. We also advanced our Information and Communications Technology (ICT) strategy this quarter with several new contracts, including the 20-year, approximately $200 million agreement with L-3 Communications MAS (Canada) Inc. as part of the federal Maritime Helicopter Project."
Operating expense growth was contained to 1.7 per cent as increases in pension costs and costs related to wireless and IT revenue growth were moderated by the early benefits of long-term expense management programs designed to transform the business model. Operating cash flow in the first quarter was $32.5 million, compared to $109.1 million in the same period of 2004. Operating cash flow in the first quarter of this year reflects the impact of a voluntary contribution of $60 million to the defined benefit pension funds and payments to employees under the 2004 voluntary early retirement incentive program of $32.8 million. Capital investments this quarter were $82.2 million as the Company advanced its infrastructure plans to provide more Atlantic Canadians with world-leading ICT solutions.
Aliant's Board of Directors declared a common share dividend of $0.295 per common share and a preferred share dividend of $0.340625, each payable on June 30, 2005 to shareholders of record on June 15, 2005.
Today the Board of Directors also approved the filing of a shelf prospectus which will enable Aliant Telecom Inc. to issue up to $350 million of Medium-Term Notes. This shelf prospectus will allow the Company to issue Notes as and when it requires funds, from time to time, during the 25-month life of the prospectus. Net proceeds may be used for general corporate and working capital purposes, to finance acquisitions and additions to property, plant and equipment, or to retire debt.
From its home base in Atlantic Canada, Aliant delivers a wide variety of innovative and traditional communications services, including local and long distance telephony, wireless, Internet, e-commerce, interactive multimedia, data and managed network services, to more than two million consumers and over 80,000 enterprises. Aliant complements its industry-leading telecommunications business with strengths in information technology solutions and knowledge-services applications. Aliant's approximately 8,400 employees build on its 100-plus year history by collaborating to deliver the highest quality of customer service, choice and convenience. Aliant has a market capitalization of approximately $3.5 billion.
Analyst conference call
A conference call with analysts is scheduled for April 29, 2005 at 8:30 a.m. (ET), (9:30 a.m. Atlantic, 10:00 a.m. N&L). The dial in number is 1-877-461-2814 or (416) 695-9753. Media are invited to attend in a listen mode. The title of the call is "Aliant First Quarter 2005 Financial Results." A replay of the session can be heard between April 29 at 11:00 a.m. (ET) to May 6 at 7:00 a.m. (ET). To access the replay, dial 1-866-518-1010 or (416) 695-5275.
This news release contains forward-looking statements related to the future financial condition and results of operations of Aliant. These statements are based on current expectations and estimates about the markets in which Aliant operates and management's beliefs and assumptions regarding these markets. These statements are subject to important risks and uncertainties which are difficult to predict and assumptions which may prove to be inaccurate. Some of the factors that could cause results or events to differ materially from current expectations include but are not limited to: general economic, market or business conditions; changing competitive environment; changing regulatory conditions or requirements; changing technology; and productivity initiatives. Some of these factors are largely beyond the control of Aliant. Should any factor impact Aliant in an unexpected manner, or should assumptions underlying the forward-looking statements prove incorrect, the actual results or events may differ materially from the results or events predicted. All of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the results or developments anticipated by Aliant will be realized or, even if substantially realized, that they will have the expected consequences for Aliant. Readers should not place undue reliance on any forward-looking statements. Further, Aliant disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or any other occurrence.
Management's Discussion and Analysis
Supplemental Investor Package
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